The aim of this research is to assess the efficacy of internal auditing in detecting and preventing financial fraud inside Soran public sector enterprises. The study is driven by the growing vulnerability of public institutions to fraud risks caused by inadequate internal control mechanisms, low transparency, and organizational constraints. A quantitative research approach was used, with a structured questionnaire distributed to 113 public sector personnel. The data were analyzed with the Statistical Package for the Social Sciences (SPSS), which included descriptive statistics, Spearman's rank correlation, the Kruskal-Wallis test, and a decision tree model to investigate the associations between important variables. The data show that internal auditing improves fraud detection and prevention. Effective internal control systems, access to financial information, and auditor independence are considered as the most important factors of audit effectiveness, with audit planning and professional competence providing further support. Although technology tools and continuous auditing methods help in fraud detection, their impact pales in comparison to organizational and human aspects. The report suggests improving internal control structures, increasing auditor independence, enabling unfettered access to financial information, and boosting auditor's professional competence in order to promote transparency and reduce financial fraud in the public sector. Keywords: Internal Auditing, Financial Fraud, Internal Control Systems, Auditor Independence.
